Vanguard Changes Benchmarks for 22 Index Funds

October 2, 2012 (PLANSPONSOR.com) – Vanguard announced new benchmark indices for 22 of its index funds.

Vanguard plans to transition six international stock index funds to FTSE benchmarks and 16 U.S. stock and balanced index funds to new benchmarks developed by the University of Chicago's Center for Research in Security Prices (CRSP). The transition from the current MSCI benchmarks for the 22 funds is expected to result in considerable savings for the funds’ shareholders over time.

The funds impacted by the change, their current benchmarks and proposed benchmarks are:

“The indexes from FTSE and CRSP are well constructed, offer comprehensive coverage of their respective markets and meet Vanguard’s ‘best practice’ standards for market benchmarks,” said Vanguard Chief Investment Officer Gus Sauter. “Equally important, and with our clients’ best interests in mind, we negotiated licensing agreements for these benchmarks that we expect will enable us to deliver significant value to our index fund and ETF shareholders and lower expense ratios over time.” In an environment in which index licensing fees, in general, have represented a growing portion of the expenses that investors pay to own index funds and ETFs, Sauter noted that the long-term agreements with FTSE and CRSP will provide cost certainty going forward with these two index providers.

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